Do you know the margins of your articles?
Many companies know which customer generates which turnover or which articles are the most successful. But what about the margins? These are crucial, as they depend directly on purchase prices and sales prices. And only if you know these can you manage your prices optimally.
In this blog article, we would like to show you how you can analyze margins in detail and derive recommendations for action - supported by our Pricing Reportwhich you can also try out on our website.
A look at the pricing report: analysis of margin development
The pricing report provides you with a detailed overview of your articles and their margin development:
- Margin overview per articleYou can see how the margins of an item have developed compared to the previous year. For example, the "Black Classic" bookcase lost a margin of 72.8 % in the previous year to 72 % in the current year - a decrease of 0.8 %.
- Root cause analysisThe margin is made up of the ratio of purchase price (PP) to sales price (SR). In this case, the purchase price has risen from €13.40 to €13.70, while the sales price has increased from €47.10 to €47.90. Nevertheless, the margin fell because the percentage increase in the purchase price was greater than the price adjustment.
Recommendations for action at the touch of a button
The pricing report goes beyond analysis and provides clear recommendations for action:
- In order to achieve the original margin of 72.8 %, for example, it is recommended that the average shelf price be raised to €49.40 - an increase of €1.50.
- This recommendation is based on real transactions, which are broken down in the report at customer group level.
Detailed insights per customer group
A particularly valuable feature of the pricing report is the analysis per customer group. This makes it clear that average values often do not reflect reality. One example:
- While the overall margin of an item is 72 %, the "Comfortable sleeping environments" customer group only achieved 54.8 % - a decrease compared to 56.5 % in the previous year.
- The reason: this customer receives the item for €29.70, far below the average retail price of €47.90. Such deviations may be due to price lists or special conditions that may be out of date.
Practical example: Detecting price corpses in the system
You can go straight into the details with the pricing report:
- Filter the affected article numbers in the ERP system and check the stored price lists and special conditions.
- The cause often lies in so-called "price corpses" - old, never checked special prices that have remained unchanged for years.
- Such conditions can be identified and adjusted to avoid unprofitable margins.
Actionable Insights: Optimize margins and increase profits
The Pricing Report is more than just an analysis tool - it leads you directly to actionable measures. You can:
- Identify outliers at customer and item level.
- Adjust prices individually to bring margins back to a profitable level.
- Increase your margins sustainably by recognizing bottlenecks and shortages.
Do you already have such a report in use?
If not, we cordially invite you to try out our pricing report without obligation. It is compatible with almost all ERP systems - from Microsoft Dynamics to other solutions.
Get in touch with us and find out how you can optimize your margins with precise analyses and clear recommendations.
We look forward to introducing you to the possibilities of our tool!
